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SERIES 66: Series66 (Series66) NASD Series 66
Free Practice Exam Questions (page: 9)
Updated On: 10-Jan-2026

Page 9 of 52
PDF with 251 Questions

The person who creates a trust is known as:

  1. The beneficiary
  2. The designate
  3. The grantor
  4. The executor

Answer(s): C

Explanation:

The person who creates a trust is known as the grantor.



Based on the Employment Retirement Income Security Act (ERISA), a retirement plan may be considered QUALIFIED, if it meets all of the following criteria EXCEPT:

  1. Eligibility Requirements
  2. Does not have to be offered to all employees
  3. Vesting
  4. The investment of contributions and determination of benefits

Answer(s): B

Explanation:

With regard to eligibility, the plan must cover all employees 21 and older who have worked for the employer for at least two years, and at least one year for 401(k) plans. If more than one year is required, the employee must then be vested immediately at 100%. Vesting describes the schedule by which employees gradually receive the portion of monies contributed by the employer. Qualified plans receive a more favorable tax treatment than non-qualified plans and follow strict guidelines set forth by ERISA, which are specific to how the plan assets are invested and distributed. Non-qualified plans do not have to be offered to all employees. Qualified plans must be available to everyone



An 8% bond is purchased at par $1,000. One year later, is has a market value of $980.
Calculate the total return on this investment.

  1. $988
  2. 6%
  3. $972
  4. 20%

Answer(s): B

Explanation:

An investment's total return takes into account any additions from interest or dividends earned, plus any appreciation or depreciation in the investment's value. In this example, a $1,000 par value bond has depreciated to $980 or 2% ($1,000-$980 divided by $1,000).
While the bond is paying 8% interest, the total return is actually 6% (8% - 2%)



Which of the following types of risk may be diversified?

  1. Market Risk and Business Risk
  2. Market Risk
  3. Business Risk
  4. None of the above

Answer(s): C

Explanation:

A diversified portfolio of securities will greatly reduce risk. However, diversification will not reduce market risk because a general decline in the market will result in a price drop for ALL company securities



Jason Sanborn is a senior-level executive with Beanster Brew, one of the world''s largest coffee bean importers. To sweeten his contract, Beanster offered Mr. Sanborn a retirement plan that pays 57% of his salary per year for the rest of his life, beginning at age 65.
Which of the following situation does this arrangement describe:

  1. A non-qualified plan
  2. A contribution limit
  3. An ERISA infraction
  4. A qualified retirement plan
  5. a profit sharing plan

Answer(s): A

Explanation:

This is an example of a non-qualified retirement plan; it is also evidence of a defined benefit plan.



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Viewing questions 41 - 45 out of 251 questions



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